The Credit Card Industry Is Huge And Bloated, Creating Opportunities For Payments Startups To Prosper

The credit card industry is mind-bogglingly massive. Credit cards channel $US4 trillion in transactions in 2013, just in the U.S.

That’s why the whole electronic payments system is such an attractive target for mobile- and cloud-based payments startups. If they could channel even a sliver of that volume, that translates to millions or hundreds of millions in revenue. But the credit card payments system has evolved into a tightly integrated web of banks, third-party vendors, credit card processors, and merchants. It isn’t easy to penetrate.

In a new report from BI Intelligence, we outline the six essential links in the credit credit payment chain, explain what each of these players do, and how much value they add, and
explain why two parts of this chain — the hardware providers and merchant service providers (MSPs) — are particularly vulnerable to disruption.

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Here are some of our key findings:

In full, the report:

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